January 20, 2000

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Being an occasional series of new political ideas–smart, plausible propositions not likely to be heard in Election 2000 but ripe for public debate and action. Just because there’s an election this year doesn’t mean people should stop thinking. –The Editors

If politics got real, the debate on campaign finance reform would focus on how ordinary citizens can acquire a measure of power in America’s money-drenched democracy. One solution is to put real money in their hands, through a federal tax credit of $100 or $200 that reimburses any adult who makes a contribution to a political organization or cause of his or her choice.

This small-d reform would not overcome all the deformities in the political system, especially in this era of deepening inequalities of wealth and income. But it would redistribute political influence in invigorating ways. And it might reverse the debilitating dynamics that now concentrate more and more power among those who have the surplus wealth and those politicians who know how to harvest it.

While reformers try to get control over the big money by limiting the torrents of contributions from powerful interests, by public financing for candidates or by access to free broadcast time, those valuable objectives still might not be enough. The democratic problem now includes a general alienation and distrust, an atrophied public faith in which half the electorate declines to vote even in presidential elections. The hostility is deepest among those of modest means–the people least likely to vote or give any of their scarce cash to politicians or political causes.

A federal tax credit would give these people the tangible means to participate without cost, but it would also give political organizations of every type the incentive to reconnect with the broad ranks of neglected citizens. Whether it is for a political party or a labor union or a civic group advocating a particular cause, the tax credit would enable the active elements of the political system to raise big money in small contributions from the many, instead of relying lazily on the few. Candidates who speak for unrepresented classes and causes would now have a source of financing that does not require them to swallow their principles or betray their followers. If either major party wished to raise its money from millions of alienated voters, it would first have to rethink its own agenda.

Many Americans still wouldn’t give a dime to politics, even with a tax rebate. But this tax-credit reform would define “politics” much more broadly than campaigns and candidates. The donations would qualify if they went to any public cause or organization that a citizen regards as his or her authentic civic expression. If someone’s idea of political action is gun or abortion rights, a church kitchen feeding the poor, a local civic association or an environmental campaign, the contribution to those interests would qualify for the tax credit. This should vastly re-energize grassroots involvement across the civic spectrum, guided by people’s own preferences, not the tax code’s fictional distinctions about what constitutes politics.

In fact, the basic transaction of a political tax credit simply gives ordinary voters a small share in the tax privileges and shelters already available to the wealthy and corporations. Both of these regularly make tax-deductible contributions to myriad activities that are styled as tax-exempt “educational” organizations or foundations. Yet, as everyone knows, the money is often directed to politics–think tanks or activists on left and right who mobilize people and public opinion for favorite issues and legislative agendas. To put it crudely, if rich people and companies get a tax break to finance favorite causes, why not let ordinary Americans do a little of the same?

If the objective is reviving interest in elections, the tax credit could be limited to active voters. In order to receive the refund, the taxpayers would have to show they actually voted in the last federal election. Thus, alienated nonvoters would have a small incentive to participate again in elections; parties and candidates would have a stronger incentive to get them to the polls. Such a reform might cost as much as $10 billion to $20 billion. That doesn’t seem like too much to spend on restoring democracy. The money, after all, would flow to whatever candidate or civic causes the citizens themselves value. Their ideas about what matters to America might begin to matter again in politics.